Sunday, February 26, 2017

The Heritage Insider

No free speech? Then no federal funding. Stanley Kurtz makes the case that it’s time to use the lever of federal funding to knock out speech codes, restrictive “free speech zones,” and other forms of campus censorship:
“[I]n today’s academy, First Amendment rights, however guaranteed or promised, are regularly ignored and infringed. On its face, then, legislative remedies at the level of the state need to be considered. If a legislator is obligated to defend anything, it is our most basic individual rights.
“Equally important, intellectual freedom and free expression are essential prerequisites to the fulfillment of a university’s core functions of the discovery, improvement, transmission, and dissemination of knowledge.
“Given all this, and given the fact that the federal government provides tens of billions of dollars in student financial aid and university research grants each year, it is incumbent upon Congress to make the protection of First Amendment rights a prerequisite of its financial assistance to America’s colleges and universities. If this has not been done in the past, it is because the American academy could once be relied upon to safeguard free speech rights on its own. For the past several decades, however, culminating in the free speech crisis of our time, the academy has ceased to be a reliable defender of the First Amendment. […]
“The Higher Education Act (HEA), enacted in 1965 and last reauthorized in 2008, provides the primary framework for the federal government’s involvement in higher education. With HEA due to be reauthorized this year, the National Association of Scholars (NAS) has offered a preliminary draft of The Freedom to Learn Amendments, by which it intends to stimulate competition, reduce unnecessary regulation, and counter rampant politicization in American higher education. Included in the Freedom to Learn Amendments are the NAS’s recommendations for ways to ensure that colleges and universities benefiting from federal aid respect and protect the free speech rights of their students.” [National Review]
We don’t need a Fannie Mae for infrastructure. Encouraging private infrastructure sounds like a good way to avoid boondoggles, but it depends on what form the encouragement takes. Secretary of Commerce nominee Wilbur Ross has suggested using public tax credits to subsidize private infrastructure by 82 percent. Such a plan, writes Edward Glaeser, will “create new perils for waste and abuse”:
“Equity investors are sure to love a system where the government pays 82% of their costs while investors get the upside. This is the kind of heads-I-win, tails-the-government-loses scenario that made such mischief in the mortgage-backed securities market before the Great Recession.
“The downsides of [this] scheme could be reduced by making tax credits contingent upon performance. If the justification for these subsidies is that infrastructure projects will generate property-tax increases, the credits should be contingent upon increases in property values.
“For every new project, define a catchment area that will potentially benefit from the new infrastructure; then define a comparable control region that is not likely to benefit from the project. The increase in property-tax revenues for the catchment relative to the control area provides the natural measure of the size of the external benefit from the project.
“If the tax credit is proportionate to the increase in property-tax revenues and is doled out over time, the potential for abuse is significantly reduced. Savvy investors will invest only in projects that are likely to lead to large increases in local property values, and those are the new projects that make the most sense.
“A further check on tax-credit abuse is to share the cost among states, localities, and the federal government. Most of the benefits of new infrastructure projects lie within a single state. Federal support should be a fraction of the total tax credit and should flow only when states are also willing to pony up cash.” [Manhattan Institute]
Corporate welfare cost taxpayers $56 billion in 2016. And that’s just the budgetary costs, write Veronique de Rugy and Tad DeHaven:
“The estimated cost to taxpayers of [corporate welfare] was roughly $56 billion in fiscal year 2016. This number includes direct and indirect subsidies to large corporations, small businesses, and industry organizations. The assistance comes from programs in various areas of the budget, including the Departments of Agriculture, Commerce, Energy, and Housing and Urban Development.
“Any budgetary cost of corporate welfare spending systematically and grossly understates the cost of corporate welfare. Indeed, some of the programs listed in the table confer advantages with what appears to be little or no budgetary impact. There are also numerous other ways that certain government policies benefit particular commercial interests but are not accounted for on a list that focuses exclusively on the budgetary impact of privilege.
“Beyond its budgetary costs, corporate welfare violates the bedrock American principle of equality under the law, introduces unwelcome distortions into the economy, fosters corruption and cronyism, and undermines markets when policymakers attempt to pick winners and losers.” [Mercatus Center]
What should conservatives do now? Sen. Jim DeMint, in his remarks at the Conservative Political Action Conference, identifies some priorities for conservatives to work on: Repeal Obamacare now. Cut taxes and simplify the tax code. Reverse the Obama administration’s abuse of religious liberty. End federal funding of Planned Parenthood. Defund the Export-Import Bank. He concludes:
“The opportunities for conservatives have never been greater. We cannot allow the loud voices inside Washington to lower our expectations and convince us that the dreams of all Americans cannot be achieved. Let’s all give Congress a big kick in the seat of the pants. Let’s tell them to get to work and to keep their promises.” [Conservative Political Action Conference]
Government funding actually hurts the programs on NPR and PBS. Jim Epstein explains:
“It's not just that these stations have become a waste of taxpayer money—they also present an obstacle to online distribution. The advent of podcasting, for example, was a singular opportunity for NPR to capitalize big on a new way of distributing its rich content. Today, NPR publishes several of the top podcasts, but in a concession to the stations, it forbids show hosts from promoting podcasts on the radio or from even mentioning NPR's popular smartphone app. Station opposition is also the reason that podcast listeners can't download episodes of NPR's two top programs, Morning Edition and All Things Considered.
“Recently, some of public radio's most talented show hosts and producers have gone to work for private podcasting ventures. One reason to leave, says former-NPR reporter Adam Davidson, is that podcasters ‘have a creative freedom that NPR's institutional frictions simply can't allow.’
“The fact is that without federal subsidies, the programs themselves could thrive. About 40 percent of funding for public television comes from private contributions (individuals, foundations, and businesses). For public radio, it's about 60 percent.
“Without the massive overhead cost of 1,400 local public radio and television stations, that revenue would more than cover the cost of producing the programs and then distributing them for free online. And yet fans of PBS and NPR might ultimately be even better served if they were to privatize and charge a monthly subscription fee—moving in the same direction as the rest of the media.” [Reason]